| Debt negotiation has become a common solution | | | | Therefore, before starting repayments under a |
| for those who are desperately trying to get rid of | | | | debt negotiation service, you need to request for |
| debt. Eliminating a substantial portion of your dues | | | | a written confirmation from the creditor and the |
| will sound great but only if you negotiate your | | | | negotiation Company that the debt will be |
| debt with the help of a responsible and an expert | | | | recorded as "Settled in full" once it is settled. |
| debt negotiation Company. In any event, a | | | | Also, remember that a part settlement of a debt |
| legitimate service provider has to be selected | | | | never forms valid consideration under the law of |
| before we embark on this journey. | | | | contract unless the relevant agreement is in |
| However, before opting for debt negotiation, we | | | | writing. Therefore, subsequent to the negotiation |
| need to be aware of some fundamental risks | | | | process, before the repayments begin, you need |
| associated with the negotiation process. We will | | | | to obtain a written confirmation from the creditor |
| then have to take a decision as to whether we | | | | stating that the residual debt will be charged off |
| vote for negotiation or some other alternative | | | | and that your payment constitutes full and final |
| approach in order to avoid or mitigate those risks. | | | | settlement of the debt. This confirmation needs |
| The major drawback of debt negotiation is its | | | | to be recorded on an official letter head of the |
| impact on the credit score. The success of the | | | | Company and has to be signed by an authorized |
| negotiation process depends on its ability to obtain | | | | officer of the Company. |
| a sizable discount on a particular debt. Once the | | | | It is also important to retain all the records |
| settlement is reached at the end of the | | | | pertaining to the negotiation process and the |
| repayment period, the creditor will write off the | | | | agreements reached at the negotiations for |
| balance debt and report the credit as "Settled". | | | | future reference. These can be very important in |
| This is where the problem originates. If a debt is | | | | the event the negotiation process becomes |
| tagged as "Settled", the future creditors and the | | | | unsuccessful and the creditor threatens to file |
| Companies who analyze your credit score will | | | | legal action against you. If the negotiation |
| know that you have not settled the debt in full! | | | | Company does not emphasize on these |
| Therefore, your credit score will go down making | | | | requirements it is important that you know the |
| it difficult to borrow in the future-the record can | | | | fundamentals behind the process in order to take |
| remain in your credit history for up to 10 years. | | | | corrective measures proactively. |